Meyer v. Gage Bros.

Reed, J. The case was tried to the court without the intervention of a jury. Plaintiffs introduced in evidence the mortgage referred to in the pleadings. They also proved that a portion of the debt secured by it remained unpaid. They also introduced in evidence the pleadings in the attachment suit, together with the writ of attachment and the return of the officer who served the same; also the record of the judgment in the case, and the order of the court for the sale of the attached property. It was also shown that the mortgage was duly recorded at the time of the levy, and that personal notice of the mortgage was given to the attorney of defendants, who was present at the time of the levy, and directed the officer to levy on the property in question. Defendants introduced in evidence the opinion of the circuit court of the United States for the district of Iowa, in the case of Crooks v. Stuart, 2 McCrary, 13. The mortgage under which plaintiffs claim the property contains the following provision: “ Said grantors, or either of them, will have the right to sell said goods at retail, according to the usual custom of merchants.” It was held by the circuit court of the United States, in said case, that a chattel mortgage, in which the mortgagor reserved to himself the right to retain possession of the mortgaged property and dispose of it for his own benefit, was fraudulent and void as against creditors. The district court made the following finding: “ The court finds affirmatively that the mortgage to the plaintiffs from McQuiston et al. was valid and in good faith, and has not been paid.” The judgment, however, was for defendant. It is suggested by counsel for defendants that the court may have reached this conclusion on the ground that the responsibility of defendants for the alleged wrongs was not established by the evidence. [609] 1. attorney tboSyto"" mentares? pass: liability of clients. [608] As stated above, the marshal levied the writ on the property in question by direction of defendants’ attorney. The [609] attachment was issned on a petition,, which was signed by the attorney, and verified by a member of defendants’ firm. They subsequently took . . . ^ judgment against Vickory and McQuiston by default on this petition. They also procured an order for the sale of the attached property, and it was subsequently sold in pursuance of this order. If a trespass was committed in the levy of the attachment, there can be no question, we think, but defendants are liable therefor. On the facts proven, the authority of the attorney to give the direction for the levy, or a subsequent ratification of his act by defendants, will be presumed. And we are satisfied that the real ground upon which the 'holding was placed was, that the question whether defendants were guilty of a trespass in procuring the goods to be seized was to be determined by the law of the forum in which the proceedings under which they were seized were had. And as, by the former rulings of that coprt, mortgages like the one under which plaintiffs claimed were held to be invalid, their act of seizing the property under process would not be a trespass. 2. JUDGMENT mentinfedom; not aparby "trespass1 eovery&rin conflicting ' decisions. In our opinion, this position is not sound. The suit in which the property was attached was between defendants and Yickory and McQuiston. Plaintiffs were not J . . Par^es Their rights could not be deterir>ine(i hy any j’udgment that might be rendered The validity of their mortgage was in no manner drawm in question in the suit; nor could it be in their absence. They could not be deprived , , of any rights which they had m the property, under a process issued against Yickory and McQuiston, in a suit to which they were not parties. The writ of attachment authorized defendants to seize the property of Yickory and McQuiston, the parties against whom it ran. It gave them no authority whatever to seize plaintiffs’ property, and it can afford them no protection if they did seize property upon it which belonged to them. [610] 3. CHATTEL awrtgage^ propeS:yí>y wnh power to sel1' As plaintiffs’ rights were in no manner determined by the proceedings in said suit, the question whether they are entitled to recovery because of the seizure of said property depends entirely on whether the mortgage under which they claim is valid. The special finding of the court determines that said mortgage was not fraudulent in fact. And the uniform holding of this court has been that the reservation by the mortgagor of the right to retain possession of the property, and sell it in the ordinary course of business, does not render the mortgage fraudulent in law. See Torbert v. Hayden, 11 Iowa, 435; Hughes v. Cory, 20 Id., 399; Clark v. Hyman, 55 Id., 14; Sperry v. Ethridge, 63 Id., 543; Jaffray v. Greenbaum, 64 Id., 492. This holding is based upon the construction given to certain statutes of the state, and it has been adhered to for more than twenty years, and has become a rule of property in the state, and we see no occasion now for departing from the rule that has been thus established. Other questions have been argued by counsel. They all relate, however, to the validity of the mortgage, and arc determined by the finding of the court that it was valid. There was no appeal from that finding. Its correctness cannot, therefore, be questioned in this court. The judgment of the district court will be Reversed.